Looking Into Luxury Earns Offers Mixed China View

By Reshma Kapadia

It’s earnings season and that means a lot of investors are parsing the comments of executives and drilling behind the numbers. Given the questions surrounding the state of China’s economy, it’s perhaps no surprise that any signs one way or another from US and European firms’ results are quickly pounced on.

Luxury goods store Prada on Daming Rd (and Beijing East Rd across the street from The Bund).

Recently, Luiz Soares, head of BlackRock’s Emerging Markets equity team, told Barrons.com that the fortunes of these luxury makers depends a bi ton strategy. LVMH (LVMUY), for example, recently cited a slowdown in its Chinese business but Prada (PRDSY) is growing by 50% in China because it is in the earlier stage of its push there, Soares says. Asa result, its margins are also improving. “In the short-term, it trades with Gucci and LVMH but do believe as this plays out and it’s more differentiated, it will stand out,” Soares says.

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